The USA and European allies have recently increased their sanctions against Russia because of the takeover of the Crimean and continuing fighting in the east of Ukraine, which has a Russian-speaking majority.
This time, the sanctions appear more severe and Russia is retaliating by forbidding certain exports and imports from European and other countries.
The main question, however, is to what extent these sanctions would include Big Oil? Namely, companies such as ExxonMobil, who have confirmed their intention to go ahead with offshore drilling in the Russian Arctic, for assistance to Russia in shale gas developments and additional LNG investment in Sakhalin LNG for more exports to Japan. These are weak technological deficiencies of Russian oil and Gas companies.
Will Big Oil once again escape from the fate of ordinary people and companies and be allowed to continue as in Russia? Or, will sanctions at least be postponed until after the summer when the Arctic offshore drilling has already been completed?
The shale oil miracle since 2011 has added three million barrels a day in production, which has reached 8.4 million barrels per day in the U.S.A. About 2-3 percent of the contents of these barrels have already caused deadly train accidents because some oil companies have failed to apply the principle of best practices by just investing remarkably small amounts of money to remove the explosive chemicals through already existing technologies. The Federal Government had allowed public comment before they became obligatory.
According the Wall Street Journal of July 31, 2014 Oil Exports Sail through the Roof“A tanker of oil from Texas is preparing to sail for South Korea this week, the first unrestricted sale of unrefined American oil since the 1970s.” In order to avoid cleaning up the shale oil before shipment and perhaps more importantly to avoid surpluses and explosive storage. This shipment, as well as others to follow, is being achieved under a new interpretation of the federal law that bans most sales of American oil overseas.
Last summer Enterprise Products Partners L.P. (NYSE:EPD) noticed a troubling trend: ultralight oil flowing from south Texas was flooding the market and pushing prices down. Energy companies and lobbyist started advocating the end of at least relaxing the ban; ExxonMobil (NYSE: XOM) openly supported lifting export restriction in December.
In lobbying Federal authority, the companies and their lawyers called the companies and their lawyers called the oil condensate and apparently this was enough to obtain export approval. The oil companies always fired a way!
Shale Intel 